North American Investment Grade CDS Index 92.83 bps -3.55%
European Financial Sector CDS Index 122.06 bps -12.08%
Western Europe Sovereign Debt CDS Index 180.83 bps -6.55%
Emerging Market CDS Index 221.81 bps -3.43%
2-Year Swap Spread 25.0 -2 bps
TED Spread 16.0 +1 bp
Economic Gauges:
3-Month T-Bill Yield .15% unch.
Yield Curve 245.0 +1 bp
China Import Iron Ore Spot $167.80/Metric Tonne unch.
Citi US Economic Surprise Index +20.60 -1.1 points
10-Year TIPS Spread 2.19% +3 basis points
Overseas Futures:
Nikkei Futures: Indicating +137 open in Japan
DAX Futures: Indicating +3 open in Germany
Portfolio:
Higher: On gains in my Biotech, Medical, Retail, Ag and Technology long positions
Disclosed Trades: None
Market Exposure: 100% Net Long
BOTTOM LINE: Today's overall market action is very bullish as the S&P 500 trades substantially higher despite some disappointment over the ECB's announced actions to stem their debt contagion. On the positive side, Coal, Disk Drive, Bank, I-Banking, Construction, Homebuilding, Road & Rail, Semi, Computer Hardware, Software and Paper shares are especially strong, rising more than 2.0%. Cyclical shares are outperforming again. (XLF) has strongly outperformed throughout the day. The Transports are clearly breaking out again. Copper is rising +.67% and lumber is gaining another +.40%. The Spain sovereign cds is plunging another -6.24% to 296.84 bps, the Italy sovereign cds is dropping -4.87% to 217.26 bps, the Portugal sovereign cds is falling -5.67% to 448.30 bps and the Ireland sovereign cds is falling -3.64% to 542.50 bps. The large declines in the euro financial sector cds and western europe sovereign cds indices are also major positives. On the negative side, Gaming, Airline, Food and Tobacco shares are mildly lower. One of my longs, (AAPL), is slowly grinding back near its all-time high of $321.30. I expect it to convincingly break above this level in the short-term and still move much higher over the intermediate/long-term on p/e multiple expansion, new products and forward estimate increases. Another one of my longs, (SXCI), is jumping +12.0% to an all-time high on volume with the announcement of an accretive acquisition. I also still see substantial upside in this stock over the intermediate/long-term. I am seeing a number of small/mid-cap stocks experiencing technical breakouts on decent volume which bodes well for further upside in the major averages after a brief pause. I expect US stocks to trade mixed-to-higher into the close from current levels on falling eurozone sovereign debt angst, declining economic fear, seasonal strength, investment manager performance angst, short-covering, less financial sector pessimism and technical buying.
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